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    Corporate governance and post-bankruptcy reorganisation performance: Evidence from Thailand

    165883_165883.pdf (124.8Kb)
    Access Status
    Open access
    Authors
    Chitnomrath, T.
    Evans, Robert
    Christopher, T.
    Date
    2011
    Type
    Journal Article
    
    Metadata
    Show full item record
    Citation
    Chitnomrath, Thanida and Evans, Robert and Christopher, Theo. 2011. Corporate governance and post-bankruptcy reorganisation performance: Evidence from Thailand. Asian Review of Accounting. 19 (1): pp. 50-67.
    Source Title
    Asian Review of Accounting
    DOI
    10.1108/13217341111130551
    ISSN
    13217348
    School
    Graduate School of Business
    Remarks

    The definitive version is available from Emerald Group Publishing Limited

    URI
    http://hdl.handle.net/20.500.11937/42196
    Collection
    • Curtin Research Publications
    Abstract

    Purpose - This research investigates the role of key corporate governance mechanisms in determining a firm's post-bankruptcy performance following reorganisation. Design/Methodology/Approach - The study is based in agency theory and uses a unique sample of 111 filing companies whose reorganisation plans have been confirmed by the Thai Central Bankruptcy Court during the period of 1999-2002. Findings - The results indicate that monitoring and incentive mechanisms are significant determinants of a firm's post-bankruptcy performance. The key monitoring mechanism is ownership concentration, measured by shares held by the largest shareholder, whereas the critical incentive mechanisms are cash compensation and percentage of common shares held by the plan administrator. The results indicate that these mechanisms can mitigate agency problems in previously insolvent companies and increase post-bankruptcy performance over a three year period. Originality/Value - The study is timely given that many organisations are facing rebuilding programs following the impact of the global financial crisis. Prior research in Thailand and elsewhere has not measured bankruptcy reorganisation outcomes in terms of the difference of actual financial performance to predicted performance and in relation to the governance factors of the reorganisation process. Neither has this aspect been considered within an agency theory framework. This provides a unique opportunity to consider these variables based on the theoretical framework of agency theory and to evaluate the importance of governance mechanisms in reorganisation proceedings.

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